How will Saigon track down Facebook retailers to collect tax?

Tax officials are reaching out to 13,500 retailers in their database, but they admit this will be a very tough task.

For the first time Ho Chi Minh City has started a new tax collection campaign targeting retailers on Facebook, the most popular social network in Vietnam.

Now tax officials are working to solve an anticipated problem: how to track down thousands of retailers across the city, many of whom are elusive, and how to calculate their earnings.

Le Thi Thu Huong, a municipal tax official, said the city has a record of 13,500 retailers on Facebook and that the law only requires those with an annual revenue of VND100 million or $4,400 to declare tax.

Tax officials will also need to figure out how to determine their taxable income, Huong said, noting that cash transactions are difficult to monitor.

“Tax authorities will need the support and cooperation from relevant sectors such as banks, postal services and Facebook itself to collect tax effectively,” she said.

District-level tax agents said they have been reaching out to the 13,500 retailers in the database, but to no avail.

District 1 and Binh Thanh District have both sent out letters asking Facebook retailers to meet officials to discuss tax payments, only to find that many of the addresses listed on Facebook are fake.

"If the retailers continue to keep quiet, we will come to them in person,” an official in Binh Thanh said.

Another official said the database should be reviewed to remove inactive retailers first before district agents begin to send out requests.

Nhung, an online retailer in Binh Tan District who sells clothes and cosmetics on Facebook, said her monthly revenue usually stays at VND30-40 million ($1,300-1,700) .

She did not hide the fact that her address and phone number are not disclosed publicly on Facebook.

“I think this is why the city's tax department doesn't have me in the database. So far I have not been contacted," Nhung said. VnExpress chose not to publish her full name.

“It’s not easy for tax authorities to have my personal information, unless they contact Facebook directly. But that is not likely to happen,” she said.

Nhung also said most of her customers pay in cash.

Mai, a cosmetics seller, said she has received a letter from District 1 even though she has a business license and has declared tax.

She said she may just ignore the letter because it's "not necessary."

Since February, Vietnam’s tax authorities have been looking at ways to collect taxes from online businesses that use Facebook and other social media sites such as Instagram and YouTube.